A new wheeze has emerged in California of entrepreneurs getting their money out before the IPO by taking a cut of the VC money.
Another of these ‘social networking’ sites called Secret raised $30 million of which $6 million was split between the two founders.
The same thing happened at Snapchat where the founders took $10 million each after a funding round.
Apparently it’s being increasingly done and the reason it’s being done is to motivate the entrepreneurs who need encouragement.
Wacky but it’s California.